Zagg Logo

Zagg

MMI-JS, LLC
https://www.zaggfranchise.com
1-877-392-6278
7100 E. Pleasant Valley Rd., Ste. 300, Independence, OH 44131

Initial Investment Range

$49,000 - $109,000

Franchise Fee

$18,000-$49,000

The franchisee will operate a retail outlet under the ZAGG name and sell products and services approved by us, including protective glass, films and covers, audio products and accessories, battery cases, wireless charging and power solutions for consumer electronics and hand-held devices (collectively, the “Products”), and repair services we authorize for smartphones, cell phones and other electronic devices (the “Services”).

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Zagg March 24, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: July 16, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
4
4
2

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor's financials show significant weakness. Net income has fallen dramatically over three years, and a massive distribution to owners in 2024 far exceeded income, causing a 50% drop in equity. Additionally, the company wrote off $730,000 in loans to related parties. This financial drain could impair the franchisor's ability to support you and grow the brand, posing a substantial risk to your investment.

Potential Mitigations

  • An experienced franchise accountant must thoroughly review the audited financials, including footnotes on related party transactions and cash flow statements.
  • Discuss the franchisor's capitalization and ability to meet its support obligations with your financial advisor.
  • Your attorney should inquire about the circumstances surrounding the large distributions and debt write-offs.
Citations: Item 21, Exhibit J

High Franchisee Turnover

High Risk

Explanation

Item 20 data reveals a significant number of franchise terminations over the past three years. A total of 27 outlets were terminated by the franchisor between 2022 and 2024, with only one non-renewal. Such a high rate of involuntary exits from the system may indicate underlying problems with franchisee profitability, franchisor support, or the overall business model. This pattern represents a critical risk that the business may not be sustainable for franchisees.

Potential Mitigations

  • Contacting a significant number of former franchisees listed in Exhibit B is crucial to understand why they left the system.
  • Your attorney can help you formulate objective questions about their experience with the franchisor.
  • Discuss the high termination rate and its causes directly with the franchisor, with your business advisor present.
Citations: Item 20

Rapid System Growth

Medium Risk

Explanation

The number of franchised units has remained relatively stagnant over the past three years, with a net decrease from 105 to 99 outlets. While not showing rapid growth, the stability is undermined by the high franchisee turnover rate disclosed elsewhere in Item 20 and the franchisor's declining financial health shown in Item 21. The lack of positive growth combined with these other factors presents a risk.

Potential Mitigations

  • Question the franchisor directly about its strategies for sustainable system growth and franchisee support with your business advisor.
  • Your accountant should analyze whether the franchisor has the financial resources to support new growth initiatives.
  • Discuss the quality and responsiveness of franchisor support with existing franchisees to see if it's strained.
Citations: Item 20, Item 21

New/Unproven Franchise System

High Risk

Explanation

The franchisor, MMI-JS, LLC (MMI-JS), was formed in 2020 and acquired the franchise system rights from ZAGG Inc. While ZAGG has a longer history, MMI-JS as the direct franchisor has a limited track record. Its financials show declining profitability, and it has sold all of its company-owned stores, eliminating its own operational experience within the system. This combination of factors increases the risk associated with an unproven franchisor entity.

Potential Mitigations

  • With your business advisor, conduct extensive due diligence on the management team's experience in both the industry and in managing a franchise system.
  • Speak to the earliest franchisees under MMI-JS's management about their experiences with support and system direction.
  • Your accountant should carefully assess MMI-JS's capitalization and financial ability to fulfill its franchisor obligations.
Citations: Item 1, Item 2, Item 20, Item 21

Possible Fad Business

Medium Risk

Explanation

The business focuses on aftermarket accessories and repair services for consumer electronics, a rapidly changing and competitive market. While not strictly a fad, the business model's long-term viability depends on adapting to new device models, technological shifts, and intense competition from online retailers and major electronics stores. The franchisor's ability to innovate and support you in this fast-paced environment is a key factor in mitigating this risk.

Potential Mitigations

  • With your business advisor, assess the long-term market demand for these specific products and services versus broader market trends.
  • Evaluate the franchisor's plans for innovation, new product sourcing, and staying relevant, as outlined in Item 11 and discussed with management.
  • Consider the business model's resilience to shifts in technology and consumer behavior with your financial advisor.
Citations: Item 1, Item 11

Inexperienced Management

Medium Risk

Explanation

The franchisor entity, MMI-JS, was formed in 2020 and took over the franchise system. While its executives have prior experience with ZAGG, the franchisor's direct operational history is limited. Furthermore, as of year-end 2024, MMI-JS no longer operates any of its own corporate stores, which could diminish its hands-on operational expertise and ability to test new initiatives before rolling them out to franchisees. This lack of current, direct operational experience is a risk.

Potential Mitigations

  • Thoroughly vet the management team's background and relevant experience in both the specific industry and in managing a franchise system with your business advisor.
  • Inquire with existing franchisees about the quality of operational guidance and support provided by the current management team.
  • Ask the franchisor how it tests and validates new procedures or products without a base of corporate-owned stores.
Citations: Item 1, Item 2

Private Equity Ownership

High Risk

Explanation

Item 1 indicates MMI-JS is owned by entities including Marathon Management Services II, LLC. The financial statements in Item 21 reveal significant related-party transactions, including large management fees and substantial loans to related parties that were later written off. This suggests that financial decisions may prioritize owner or affiliate interests over the long-term health of the franchise system, a risk often associated with certain ownership structures.

Potential Mitigations

  • Your accountant must carefully analyze the extensive related-party transactions detailed in the financial statement footnotes.
  • Talk to franchisees about any changes in support, fees, or system direction that may be related to the ownership structure.
  • Your attorney should help you understand the implications of the ownership structure and the potential for conflicts of interest.
Citations: Item 1, Item 10, Item 21

Non-Disclosure of Parent Company

Medium Risk

Explanation

The FDD discloses that MMI-JS is the franchisor, but ZAGG Inc. is the brand owner and primary supplier. This structure is a form of parent/affiliate relationship. ZAGG's financials are not provided in the FDD. While not necessarily a violation, your success is heavily dependent on the stability and performance of ZAGG, whose financial health is not disclosed. MMI-JS's viability is directly tied to ZAGG, creating a significant information gap and risk.

Potential Mitigations

  • Your attorney should review the Master License Agreement between MMI-JS and ZAGG to understand the stability of their relationship.
  • Ask the franchisor for information regarding the financial health and long-term strategy of ZAGG, the brand owner and supplier.
  • With your business advisor, research ZAGG Inc. as a separate public or private entity to the extent possible.
Citations: Item 1, Item 21

Predecessor History Issues

Low Risk

Explanation

Item 1 identifies ZAGG Inc. and Zagg Retail, Inc. as predecessors. The FDD states there is no litigation (Item 3) or bankruptcy (Item 4) to disclose for the current franchisor, its predecessors, or affiliates. While no negative history is disclosed, the transition of the franchise system from these predecessors to the current franchisor in 2020 is a material fact to consider when evaluating the system's stability and history.

Potential Mitigations

  • Your attorney should confirm the details of the transition from the predecessors as outlined in Item 1.
  • When speaking with long-term franchisees, inquire about their experience under the predecessor management and any changes since the transition.
  • A business advisor can help you research the history of the ZAGG brand and its previous franchise operations.
Citations: Item 1, Item 3, Item 4

Pattern of Litigation

Low Risk

Explanation

The franchisor states in Item 3 that there is no litigation that must be disclosed. While the absence of litigation is a positive sign, it does not guarantee a dispute-free system. This risk was not identified in the FDD package.

Potential Mitigations

  • It is still prudent to conduct online searches for any news articles or informal complaints related to the franchisor or its management.
  • When speaking with current and former franchisees, asking about their general satisfaction and any disputes they are aware of can be insightful.
  • Your attorney can explain the types of litigation that are material and must be disclosed under franchise law.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
6
2
7

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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3

Financial & Fee Risks

Total: 10
3
4
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

4

Legal & Contract Risks

Total: 16
5
6
5

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

5

Territory & Competition Risks

Total: 5
3
1
1

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

6

Regulatory & Compliance Risks

Total: 10
6
2
2

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

7

Franchisor Support Risks

Total: 4
1
3
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

8

Operational Control Risks

Total: 12
3
6
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

9

Term & Exit Risks

Total: 18
9
3
6

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 2
2
0
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.